S. C. Loveland, Inc. v. East West Towing, Inc.

• Decision Date: 12 December 1979
• Docket Number: No. 76-4447,76-4447
• Citation: 608 F.2d 160
• Parties: S. C. LOVELAND, INC., Plaintiff-Appellee, Cross-Appellant, v. EAST WEST TOWING, INC., Defendant, Cross-Appellee, E. & I., Inc., IN PERSONAM, and the TUG MISS CAROLYN, etc., IN REM., Defendants-Appellants, Cross-Appellees. STATE OF FLORIDA, DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellant, v. S. C. LOVELAND, INC., et al., Defendants-Appellees. ST. PAUL MERCURY INSURANCE COMPANY et al., Plaintiffs-Appellants, v. EAST WEST TOWING, INC., Defendant-Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 160

608 F.2d 160

S. C. LOVELAND, INC., Plaintiff-Appellee, Cross-Appellant, v. EAST WEST TOWING, INC., Defendant, Cross-Appellee,

E. & I., Inc., IN PERSONAM, and the TUG MISS CAROLYN, etc.,

IN REM., Defendants-Appellants, Cross-Appellees.

STATE OF FLORIDA, DEPARTMENT OF TRANSPORTATION, Plaintiff-Appellant, v. S. C. LOVELAND, INC., et al., Defendants-Appellees.

ST. PAUL MERCURY INSURANCE COMPANY et al., Plaintiffs-Appellants, v. EAST WEST TOWING, INC., Defendant-Appellee.

No. 76-4447.

United States Court of Appeals Fifth Circuit.

Dec. 12, 1979.

Theodore G. Dimitry, Houston, Tex., for St. Paul Mercury Ins., et al.

Dewey R. Villareal, Jr., Tampa, Fla., for St. Paul Mercury Ins., et al. and East West Towing, Inc.

E. Clay McGonagill, Jr., Winifred Sheridan Smallwood, H. Reynolds Sampson, Gen. Counsel, Alan E. DeSerio, Tallahassee, Fla., for State of Florida Dept. of Transportation.

Christian D. Keedy, Miami, Fla., for S. C. Loveland.

William L. Von Hoene, New Orleans, La., for East West Towing, Inc.

Ronald A. FitzGerald, Fort Lauderdale, Fla., for E. & I. Inc., etc.

Appeals from the United States District Court for the Southern District of Florida.

Before TUTTLE, TJOFLAT and HILL, Circuit Judges.

JAMES C. HILL, Circuit Judge:

These three admiralty cases revolve, to a large extent, around questions of insurance coverage. The occurrences giving rise to these cases are complex and, at first glance, confusing, but the district judge did an admirable job of setting out the facts in his opinion at 415 F.Supp. 596 (S.D.Fla.1976). The district court's conclusions of law, for the most part, also comport with our conclusions. We therefore adopt Judge Roettger's opinion as our opinion on appeal, with one modification.

A brief restatement of the key facts and issues will be helpful in understanding our disposition of these appeals. On August 20, 1973, the barge LOVELAND 34, owned by S. C. Loveland, Inc., (Loveland) dragged anchor and crashed into the Sunshine Skyway Bridge, owned by the State of Florida. Two days earlier employees of East West Towing, Inc. (East West) had anchored the barge in spoil banks in close proximity to the bridge and left it there unattended. On August 19, during a thunderstorm, the barge dragged anchor and drifted closer to the bridge and the bridge's owner, the State of Florida, called the Coast Guard. On August 20, the bridge tender twice called the bridge foreman for the State of Florida Department of Transportation who twice notified the Coast Guard that the barge was drifting dangerously close to the bridge. Shortly thereafter during a rain squall the barge collided with the bridge causing damage to the bridge and barge. The bridge employees had been watching the barge with binoculars and could identify it. A ship and at least one barge had previously hit the bridge.

The Coast Guard notified Loveland that the barge was against the bridge before hauling it away from the bridge. Loveland called a firm in Tampa and hired a tug which took the barge from the cutter within thirty minutes of receiving the call.

The barge had been towed from New Orleans to Tampa by the tug MISS CAROLYN. When the tug and its tow left New Orleans, the tug was owned by East West Towing, Inc., but during the course of the tow, while the tug and the barge were in Panama City, Florida, documents of sale of the MISS CAROLYN to E. & I., Inc. (E. & I.) were executed in New Orleans. The MISS CAROLYN was not, however, delivered to E. & I. until after the East West crew had anchored the barge in spoil banks in the mouth of Tampa Bay. Another tug operated by East West, the GARY STEPHENS, was to have relieved the MISS CAROLYN of the completion of the tow of the LOVELAND 34 to Jacksonville, Florida, but before the GARY STEPHENS could locate the barge the collision occurred.

Shortly after the collision, the barge owner, Loveland, sued the tug MISS CAROLYN In rem and East West and E. & I. In personam. East West and E. & I. cross-claimed against each other for damages resulting from any liability to the plaintiff. In a second suit, the State of Florida sued Loveland and East West In personam and the tug MISS CAROLYN and the barge LOVELAND 34 In rem. Loveland cross-claimed against East West and the tug MISS CAROLYN. Finally, St. Paul Mercury Insurance Company (St. Paul) sought a declaratory judgment to declare the policy of insurance issued to East West null and void because of East West's alleged change of ownership or management of the vessel without the underwriters' written consent. Loveland and E. & I. intervened, each asserting an interest as a potential beneficiary of the policy.

The three suits were consolidated for purposes of pleading and trial. The trial court ultimately apportioned fault for the collision as follows: 25% To the State of Florida Department of Transportation (as owners of the bridge), 50% To the tug MISS CAROLYN In rem, and 25% To East West In personam for its own fault as well as that of the tug GARY STEPHENS. With regard to insurance coverage, the trial court found the underwriters liable under their policy of insurance issued on the tug MISS CAROLYN because first, the negligent acts of the MISS CAROLYN occurred prior to the time that a change in management and ownership occurred, and second, there was written assent to the change in ownership by virtue of two endorsements issued after the collision and after the change in ownership.

The district court's discussion of the time when a change in interest or ownership in the tug MISS CAROLYN occurred relative to the occurrence of the negligent acts for which the tug MISS CAROLYN is liable In rem is substantially correct. See S. C. Loveland, Inc. v. East West Towing, Inc., 415 F.Supp. 596, 609-12. Indeed, the comments we add do not change the result reached by the district court. As the district court noted, the critical question is whether to apply the law of Louisiana or Florida, for the Civil Code of Louisiana may not require delivery as a condition of passage of title while Florida's Uniform Commercial Code requires delivery to the purchaser in order for title to pass. The district court ultimately applied Florida law, concluding that in determining the validity and effect of a transfer of title in personalty, the universally recognized conflicts law is that Lex rei sitae or the law of the place of the situs of the personalty governs. While we agree with the district court's analysis and application of Florida law, we note that the district court initiated its discussion by stating "in questions involving contract interpretation, admiralty conflicts law recognizes the principle of Lex loci contractus ; that is the law of the place where the contract is made." Id. at 610. While that is a correct rule of conflicts in the case of maritime contract, the district court was not bound to apply the admiralty conflicts rule in this case because a contract for the sale of a ship is not a maritime contract. Atlantic Lines, Ltd. v. Narwhal, Ltd., 514 F.2d 726, 731 (5th Cir. 1975); Richard Bertram & Co. v. The Yacht, Wanda, 447 F.2d 966, 967 (5th Cir. 1971); The Ada, 250 F.2d 194, 195 (2d Cir. 1918); Camper and Nicholsons, Ltd. v. The Yacht " Fontainebleau II", 292 F.Supp. 734, 735 (S.D.Fla.1968); Grand Banks Fishing Co. v. Styron, 114 F.Supp. 1 (D.Me.1953). Hence, the application of Florida law under the circumstances is unfettered by suggestions that admiralty conflicts law would require the application of Louisiana law. We find the district court's decision to apply Florida law in determining the time of the passage of title to the tug MISS CAROLYN firmly grounded in reason and authority, and we therefore affirm the court's holding East West liable In personam for its negligence in leaving the barge unattended in an exposed area in close proximity to the bridge, improperly anchoring the barge in a spoil bank, failing to safeguard the anchored barge, failing to inform the barge's owners of the change in circumstances, and failing to obtain a relief tug. We also affirm the court's holding the underwriters liable under their policy of insurance issued on the tug MISS CAROLYN. The finding that the tug GARY STEPHENS was negligent in failing to pick up the unattended barge promptly and failing to come to the aid of the barge before it dragged anchor was likewise correct.

The district court held that negligence of the State of Florida Department of Transportation was also a proximate cause of the collision and resulting damages. Following the rule adopted in United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975), the court allocated damages among the parties "proportionately to the comparative degree of their fault," Id. at 411, 95 S.Ct. at 1716, 44 L.Ed.2d at 262, and apportioned twenty-five percent of the fault in the collision to the State of Florida Department of Transportation. The court found that the state's negligence consisted of its agents' failure to do no more to prevent the drifting barge from colliding with the bridge than to contact the Coast Guard. The court found that afternoon thundershowers in the area in August are a common and foreseeable occurrence and that squalls in fact occurred on both the afternoons of August 19th and 20th. Thus the possibility of a collision was foreseeable to the agents of the state watching the barge drift toward the bridge, particularly in view of prior collisions of a ship and at least one other barge with the bridge. Specifically, the state made no efforts to determine the ownership of the barge and contact its owner although the employees could identify the barge. At the time the owner was frantically trying to locate the barge and he acted promptly after learning its whereabouts, thus indicating that he would have taken the necessary steps to have the barge taken under tow. Also the state made no effort to summon any of the many tugs in the area to come to...